U.s. Global Investors, Inc. · NASDAQ:GROW
U.s. Global Investors — Q2 2013 Earnings Presentation
73 slides from U.s. Global Investors's earnings presentation, Feb 7, 2013
Slide 1: U.S. Global Investors: Searching for Opportunities, Managing Risk
U.S. Global Investors Searching for Opportunities, Managing Risk Frank E. Holmes CEO and CIO Susan McGee President and General Counsel Catherine Rademacher CFO Susan Filyk Investor Relations www.usfunds.com February 7, 2013 1.800.US.FUNDS 12-773
Slide 2: Today's Presenters
Today’s Presenters Frank Holmes Susan McGee Catherine Rademacher Susan Filyk www.usfunds.com February 2013 12-773 2
Slide 3: Forward-Looking Statements
Forward-Looking Statements During this webcast we may make forward-looking statements about our relative business outlook. Any forward-looking statements and all other statements made during this webcast that don’t pertain to historical facts are subject to risks and uncertainties that may materiall
Slide 4: About U.S. Global Investors (GROW)
About U.S. Global Investors (GROW) A boutique publicly listed investment adviser specializing in gold, natural resources and emerging markets opportunities around the world. www.usfunds.com February 2013 12-773 4
Slide 5: GROW Strengths
GROW Strengths “Go-to” stock for exposure to emerging markets and resources Debt-free, strong balance sheet with a reflexive cost structure Monthly dividend and return on equity discipline www.usfunds.com February 2013 12-773 5
Slide 6: Industry Fund Flow Comparison
Industry Fund Flow Comparison www.usfunds.com February 2013 12-773 6
Slide 7: Top Institutional Holders of GROW
Top Institutional Holders of GROW 1. Royce and Associates 14% 2. Financial and Investment 10% Management Group 3. Perritt Capital Management 4% 4. Fidelity Management 4% & Research Co. 5. SunAmerica Asset Management 4% Source: NASDAQ Percentage of shares outstanding as of 12/31/2012 www.usfunds.com
Slide 8: Company Snapshot
Company Snapshot NASDAQ: GROW Market Cap: $62.1 million Price on 12/31/12: $4.01 52-wk Range: $4.01 - $7.79 10-Year 14.59% Annualized www.usfunds.com February 2013 12-773 8
Slide 9: GROW Performance and Rationale to Buy Stock
GROW Performance — Past 3 Months Rationale to Buy Stock Past performance does not guarantee future results. www.usfunds.com 9 February 2013 12-773
Slide 10: GROW Dividends — Paid Monthly
GROW Dividends — Paid Monthly *At share price of $4.00 as of 12/31/2012 Dividends through 1/29/13 www.usfunds.com February 2013 12-773 10
Slide 11: Buy Back Stock
Buy Back Stock The board approved a repurchase of up to $2.75 million of its outstanding common stock on the open market through calendar year 2013 May be suspended or discontinued at any time Algorithm is used to buy back shares on down days, in accordance with all applicable rules and regulations
Slide 12: Strategic Partnership with Galileo
Strategic Partnership with Galileo GROW has agreed to invest in Galileo Global Equity Advisors by purchasing 50% of issued and outstanding shares* Toronto-based company Accretive to GROW 5-Star fund 2013 Lipper fund award for best small/mid cap over 5 years *Expected to close by 3/31/13 The Galileo
Slide 13: Managing Expectations — Yearly Volatility
Managing Expectations — Yearly Volatility The Math Standard Deviation (as of 12/31/12) based on 10-Year Data Rolling 1 Year U.S. Global Investors (GROW) 114.9% NYSE Arca Gold 35.3% BUGS Index (HUI) WTI Crude Oil 35.2% MSCI Emerging Markets (MXEF) 31.2% S&P 500 Index (SPX) 18.2% Gold Bullion 14.0% 12
Slide 14: Card Counting Allowed
Card Counting Allowed Managing Expectations — Anticipate Before You Participate Measuring Monthly Volatility Number of Number of Frequency of +10% Moves -10% Moves ±10% Moves U.S. Global Investors (GROW) 752 593 52% NYSE Arca Gold BUGS Index (HUI) 490 296 30% WTI Crude Oil 434 302 29% MSCI Emerging
Slide 15: www.usfunds.com
www.usfunds.com February 2013 12-773 15
Slide 16: Follow the Money — Equities and Gold Have Outperformed Bonds
“Follow the Money” — Equities and Gold Have Outperformed Bonds www.usfunds.com February 2013 12-773 16
Slide 17: Redemptions from Equity Funds to Bond Funds Appear Excessive
Redemptions by Investors from Equity Funds to Bond Funds Appear Excessive and They Have Missed a Spectacular Stock Market Rebound www.usfunds.com February 2013 12-773 17
Slide 18: Long Term Bonds Seem Expensive, Overvalued and More Risky than Equities
Long Term Bonds Seem Expensive, Overvalued and More Risky than Equities www.usfunds.com February 2013 12-773 18
Slide 19: Quarterly Average Assets Under Management
Quarterly Average Assets Under Management www.usfunds.com February 2013 12-773 19
Slide 20: Key Expenses Declined Greater Than Revenue
Key Expenses Declined Greater Than Revenue www.usfunds.com February 2013 12-773 20
Slide 21: Asset Breakdown
Asset Breakdown Data for SEC-registered funds as of December 31, 2012. www.usfunds.com February 2013 12-773 21
Slide 22: Earnings Per Share (Quarterly)
Earnings Per Share (Quarterly) www.usfunds.com February 2013 12-773 22
Slide 23: Pre-Tax Profit Margin (Quarterly)
Pre-Tax Profit Margin (Quarterly) www.usfunds.com February 2013 12-773 23
Slide 24: Balance Sheet Strength – No Debt
Balance Sheet Strength – No Debt www.usfunds.com February 2013 12-773 24
Slide 25: GROW Peer Comparison
GROW Peer Comparison Growth Value Income 3 Year Average 3 Year Average Dividend EPS Growth Return on Equity Yield GROW -51.9% 10.3% 1.5% Peers* -3.6% 16.3% 2.6% Dividend yields calculated as of 1/30/2013. Earnings per share and return on equity based on the quarter ended 12/31/2012. * Median calcula
Slide 26: Income Statement – Financial Analysis
Income Statement – Financial Analysis Catherine Rademacher CFO www.usfunds.com February 2013 12-773 26
Slide 27: Income Statement (unaudited)
Income Statement (unaudited) www.usfunds.com February 2013 12-773 27
Slide 28: Income Statement (unaudited)
Income Statement (unaudited) www.usfunds.com February 2013 12-773 28
Slide 29: Income Statement (unaudited)
Income Statement (unaudited) www.usfunds.com February 2013 12-773 29
Slide 30: Balance Sheets (unaudited)
Balance Sheets (unaudited) www.usfunds.com February 2013 12-773 30
Slide 31: Balance Sheets (unaudited)
Balance Sheets (unaudited) www.usfunds.com February 2013 12-773 31
Slide 32: Significant Events
Significant Events Susan McGee President and General Counsel www.usfunds.com February 2013 12-773 32
Slide 33: Performance and Results Oriented
“Performance and Results Oriented” Investment leadership results in performance Winner of 29 Lipper performance awards, certificates and top rankings since 2000 (Four out of 13 U.S. Global Investors Funds received Lipper performance awards from 2005 to 2008, six out of 13 received certificates from
Slide 34: Fund Recognition: Funds in the Top Percent for 10-Year Period
Fund Recognition: 4 Funds in the Top 4 Percent for 10-Year Period www.usfunds.com February 2013 12-773 34
Slide 35: www.usfunds.com
www.usfunds.com February 2013 12-773 35
Slide 36: Focus on Education
Focus on Education 43 MFEA STAR Awards for Excellence in Education www.usfunds.com February 2013 12-773 36
Slide 37: Branding – Education
Branding – Education Investor Alert and Advisor Alert are key communication tools. Our original, award-winning educational content is in high demand from investors via email, website, social media platforms, apps. www.usfunds.com February 2013 12-773 37
Slide 38: Branding – Education
Branding – Education Frank Talk blog subscriptions continue to grow. Syndication of commentaries and blog posts continued to expand reach. 2013 Outlook Presentation Gets 112,442 hits on Business Insider. Wall Street Journal selects Frank Holmes as contributor for The Experts. www.usfunds.com Februar
Slide 39: Branding and Marketing of GROW
Branding and Marketing of GROW 8 TV/Radio/Podcasts 26 Frank Talk blog entries 22 Total Interviews 122 Newsletter 623 Web mentions recommendations Data from 9/30/2012 – 12/31/2012 www.usfunds.com February 2013 12-773 39
Slide 40: See the full webcast at usfunds.com
See the full webcast at usfunds.com www.usfunds.com January 9, 2013 February 2013 12-773 40
Slide 41: Not Just the Fed: There's Been a Global Easing Cycle
Not Just the Fed: There’s Been a Global Easing Cycle www.usfunds.com February 2013 12-773 41
Slide 42: Follow the Money — Unprecedented Cash Injections from Central Banks
“Follow the Money” — Unprecedented Cash Injections from Central Banks www.usfunds.com February 2013 12-773 42
Slide 43: Price Reversal — Chinese Stocks Undervalued
Price Reversal — Chinese Stocks Undervalued “Chinese Stocks Looking Like a Bargain” October 22, 2012 www.usfunds.com February 2013 12-773 43
Slide 44: Money Supply Reversal
Money Supply Reversal www.usfunds.com February 2013 12-773 44
Slide 45: Money Flowing to Asian Emerging Markets — Follow the Money
Money Flowing to Asian Emerging Markets — “Follow the Money” www.usfunds.com February 2013 12-773 45
Slide 46: Consumers Conquering Debt
Consumers Conquering Debt www.usfunds.com February 2013 12-773 46
Slide 47: Equities Remain Attractive Despite Low Bullish Sentiment
Equities Remain Attractive Despite Low Bullish Sentiment www.usfunds.com February 2013 12-773 47
Slide 48: E7 — Emerging Markets Remain Attractive
E7— Emerging Markets Remain Attractive www.usfunds.com February 2013 12-773 48
Slide 49: E7 — Emerging Market Equities Offer Attractive Valuations
E7 — Emerging Market Equities Offer Attractive Valuations www.usfunds.com February 2013 12-773 49
Slide 50: Europe's Banks Need More Capital
Europe’s Banks Need More Capital — Postponed by Basel III — “Follow the Money” www.usfunds.com February 2013 12-773 50
Slide 51: Price Reversal — China's PMI and IP
Price Reversal — China’s PMI and IP www.usfunds.com February 2013 12-773 51
Slide 52: Housing — Major Price Reversal Good for Employment and Commodity Demand
Housing— Major Price Reversal Good for Employment and Commodity Demand…Collateral Stimulation…Cars, Appliances www.usfunds.com February 2013 12-773 52
Slide 53: Construction Steel Stocks Experienced Deeper Drawdown in 2012
Construction Steel Stocks Experienced Deeper Drawdown in 2012 — Opportunity for Restocking? Chevy Volt www.usfunds.com February 2013 12-773 53
Slide 54: Prices of Spot Iron Ore in China and Shanghai Rebar Futures Have Edged Up
Prices of Spot Iron Ore in China and Shanghai Rebar Futures Have Edged Up on the Back of Better Economic Activity www.usfunds.com February 2013 12-773 54
Slide 55: Tipping Point 2014
Tipping Point 2014 Impact is About to Be Felt Quite Soon High Speed Train, China www.usfunds.com February 2013 12-773 55
Slide 56: High-Speed Rail is a Growth Opportunity for U.S. Companies
High-Speed Rail is a Growth Opportunity for U.S. Companies www.usfunds.com February 2013 12-773 56
Slide 57: Gold Demand Drivers
Gold Demand Drivers Elvis Presley www.usfunds.com February 2013 12-773 57
Slide 58: Gold Fundamentals Remain Strong With Central Bank Net Purchases
Gold Fundamentals Remain Strong With Central Bank Net Purchases www.usfunds.com February 2013 12-773 58
Slide 59: Total Global Gold ETF Holdings
Total Global Gold ETF Holdings www.usfunds.com February 2013 12-773 59
Slide 60: Driver: The Love Trade
Driver: The Love Trade www.usfunds.com February 2013 12-773 60
Slide 61: Holidays Drive Gold Demand
Holidays Drive Gold Demand www.usfunds.com February 2013 12-773 61
Slide 62: Gold "Love Trade"
Gold “Love Trade” Strong Correlation Between Rising Incomes and Gold Price www.usfunds.com February 2013 12-773 62
Slide 63: Bullion Has Outperformed Gold Stocks Over the Last Four Years
Bullion Has Outperformed Gold Stocks Over the Last Four Years www.usfunds.com February 2013 12-773 63
Slide 64: +3 Million Ounce Discoveries Becoming Scarce
+3 Million Ounce Discoveries Becoming Scarce www.usfunds.com February 2013 12-773 64
Slide 65: Exploration Spending Has Skyrocketed Without True Success
Exploration Spending Has Skyrocketed Without True Success At $9 billion/year plus replacement requirements of 90 Million oz/year a discovery cost of $100/oz is needed. This is low. www.usfunds.com February 2013 12-773 65
Slide 66: The Replacement Cost for an Ounce of Gold is $1500
The Replacement Cost for an Ounce Of Gold is $1500 with $1700 as a Sustainable Number (2012) www.usfunds.com February 2013 12-773 66
Slide 67: Merrill Lynch is Calling $2,400 by 2014 — Fear Trade
Merrill Lynch is Calling $2,400 by 2014 — Fear Trade www.usfunds.com February 2013 12-773 67
Slide 68: Oil and Gold Undervalued Compared to Rise in Other Asset Classes
Oil and Gold Undervalued Compared to Rise in Other Asset Classes of U.S. Economy Since 1980, OiI and Gold Undervalued Relative to Other Asset Classes www.usfunds.com February 2013 12-773 68
Slide 69: Reasons for Active Management — Annual Rotation in Leadership
Reasons for Active Management — Annual Rotation in Leadership 1-2-3 www.usfunds.com February 2013 12-773 69
Slide 70: Fund Performance
Fund Performance www.usfunds.com February 2013 12-773 70
Slide 71: Disclosures
Disclosures Please consider carefully a fund’s investment objectives, risks, charges and expenses. For this and other important information, obtain a fund prospectus by visiting www.usfunds.com or by calling 1-800-US-FUNDS (1-800-873-8637). Read it carefully before investing. Distributed by U.S. Glo
Slide 72: Disclosures
Disclosures Morningstar Ratings are based on risk-adjusted return. The Morningstar Rating for a fund is derived from a weighted-average of the performance figures associated with its three-, five- and ten-year (if applicable) Morningstar Rating metrics. Past performance does not guarantee future res
Slide 73: Disclosures
Disclosures Alpha is a measure of performance on a risk-adjusted basis. Alpha takes the volatility (price risk) of a mutual fund and compares its risk-adjusted performance to a benchmark index. The excess return of the fund relative to the return of the benchmark index is a fund's alpha. Standard de
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